Oral Answers to Questions

Stephen Hammond: The Secretary of State will want to acknowledge that since privatisation rail patronage has increased by 40 per cent. However, in contrast to his answer to the hon. Member for Lewes (Norman Baker), recent independent research from the Institution of Civil Engineers and the university of Southampton clearly indicates that improvements in capacity have not kept pace with that increase in patronage. Following last week's unregulated fare increases of up to 11 per cent., many people using the railways believe that the Government's only strategy for dealing with capacity is to price them off them. Does not the Minister realise that overcrowding plus huge increases in unregulated fares does not represent value for money for the travelling public?

Paul Clark: Cycling has an important role to play in people's transport choices. The Government have been supporting local authorities financially, by issuing guidance and advice, and by providing ideas and inspiration. All of that work is supported by a £140 million programme developed by our advisers, Cycling England.

Fiona Mactaggart: In view of the fact that women are much less likely than men to have direct access to and use of a car, what is the Department doing to make sure that women who use public transport, walk or cycle, who have been shown in studies conducted by the Department to be fearful of—

Vera Baird: An equality impact assessment was carried out when "A Framework for Fairness" was launched, and another will be carried out on the Equality Bill. I should make clear, however, that we intend to tackle low pay for women in the public sector and also in the private sector. We have set out a number of models for how we intend first to expose it and secondly to tackle it. I believe that the hon. Lady will join cause with us, and I look forward to working with her.

Julie Morgan: I know that my hon. and learned Friend will agree that paving the way for equality carries costs, but does she also agree that we should measure the benefits as well? Should we not be especially vigilant at a time of economic difficulty when it is only too easy for things to slip, which would surely cause much more problems in the long term?

Vera Baird: We have been examining, in specific terms, the impact that, for instance, going through a whole gender pay audit can have. Sometimes it is a process rather than an impact. That is why we have hesitated rather than going wholesale for impact assessments, assuming that they are the key to all mythologies and will put everything right. They do not necessarily do that.
	We are working on this, and we consider that the watchword for the equality Bill and for equal pay in particular is transparency. We will pin a number of proposals on to that basic bedrock as we take the Bill forward.

Vera Baird: Apart from the fact that that was obviously an utterly reprehensible way in which to behave, Aberdeen city council, like others, has a duty to promote equality of opportunity for disabled people. It therefore behaved not only in a disreputable way, but almost certainly in an unlawful way. We must make absolutely plain that that kind of discriminatory behaviour will not be tolerated as we move into a new era in which everyone starts to appreciate the importance and value that are to be attached to diversity.

Nicholas Winterton: Mrs Jenny Davies, the president of the Prestbury branch of the Women's Institute in my constituency, has drawn my attention to the National Federation of Women's Institutes campaign to end violence against women. What are the Government doing to develop and implement an integrated strategy to raise awareness of and prevent violence against women?

Theresa May: I welcome the Government's commitment to publish a consultation on a Government strategy on violence against women, but I regret the delay in bringing this forward. My right hon. Friend the Leader of the Opposition called for such a cross-cutting Government strategy more than a year ago. All the groups involved in this area—including, so it would seem from the question of my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton), the Prestbury branch of the Women's Institute—have been calling for such a strategy for some time now. Indeed, the End Violence Against Women coalition has even published a blueprint for such a cross-cutting Government strategy. Following the consultation, when will this Government strategy be put in place, and what on earth has taken the Government so long?

James Purnell: With permission, Mr. Speaker, I would like to make a statement on employment. Unemployment began rising in January, as this country, like so many others, began to feel the shockwaves of the credit crunch rippling out from the banking system in the United States. Each and every job lost is a personal tragedy. Our goal is to ensure that newly unemployed people do not fall out of touch with the labour market, and we will do everything we can to bring those who have been out of a job for some time back closer to the world of work. So, we will continue to reform the welfare state to help people back into work now and to prepare them for the upturn.
	Britain starts from a strong position. The number of people in work reached its highest ever level this summer—29.5 million; earlier this year, we experienced the lowest claimant unemployment level since the 1970s; and there are more than 500,000 vacancies in the economy. By contrast, in the 1980s and 1990s, claimant unemployment twice hit 3 million, and between 1979 and 1997 the number of people on incapacity benefits trebled to more than 2.5 million. We all know the human cost that lies behind those figures: communities were scarred, and still carry those scars today; and whole families were left without work, not just for years, but for generations.
	For the first time since 1945, the global economy is predicted to shrink next year. No country can be immune, but all Governments have the same goal: to make the downturn as shallow and as short as possible. If this had been done in the 1990s, the recession then would have been less costly to communities, less costly for individuals and less costly for the economy as a whole. Yesterday, my right hon. Friend the Chancellor set out details of a £20 billion fiscal stimulus package to support our economy—it is the right action to reduce, as far as possible, the human and financial cost of the downturn. The money means help for small business, a timely boost to the economy and capital projects to maintain employment.
	The money also means a significant boost for older people in this country; we are putting in place a basic state pension of £95.25 and an increase to the guaranteed credit, which will ensure that no pensioner need live on less than £130 a week. My right hon. Friend said yesterday that he wants pensioners to benefit as quickly as possible. As we are not able to increase the pension and pension credit rates before April, we therefore announced that an additional £60 payment will be made to 15 million people from January. That is in addition to the £10 Christmas bonus, which will be paid as normal. The measures represent a significant increase in Government support for older people, which will really make a difference to pensioners, particularly if prices fall as expected next year.
	The Chancellor also announced extra help for my Department next year. That £1.3 billion package will ensure that we can respond to the higher number of people claiming benefits. Over the past decade, we have reformed the welfare state to match more support with more responsibility. Yesterday's announcement will enable us to continue our reform of welfare, to offer real help to people in these tough times. We will be able to maintain the service we provide, and strengthen our response in three ways.
	First, we need to make the right support and conditionality available. We need to ensure that Jobcentre Plus can deliver as good a service as it does today to more people tomorrow. In the past, Governments have cut back on support and conditionality as the claimant count has risen. We want to do the opposite, and do more to help people, rather than less. Over the past 10 years, we have modernised our employment services almost beyond recognition. People used to get benefits from one agency and job advice from another—now someone cannot sign on without looking for work. Jobcentre Plus takes 80,000 calls a week, and its website gets 350,000 visits a day. The National Audit Office reports that
	"the Organisation for Economic Co-operation and Development found significant improvements in unemployment levels in the United Kingdom...related closely to the adoption of active job-seeking measures".
	Therefore, our first priority remains to ensure that everyone continues to receive this top quality service, and I am pleased to say that the system is coping well. Our target for jobseeker's allowance is to process all new claims within 11½ days—in the year to date, we are processing them within an average of 10. For our crisis loans, demand has gone up, but processing times continue to fall, and budgeting loans are being dealt with 20 per cent. quicker than their target time.
	But with higher levels of claimant count, we need further investment. The extra money that the Chancellor announced yesterday will ensure that we are able to maintain and expand our offer during a time of increased pressure on our services—help with CV-writing and job search, and time with personal advisers to develop action plans; to identify skills needs; and to get support with training, child care and interview techniques.
	We need to ensure we have the right capacity. In the last spending round the Department reduced its staffing by 31,000 and has increased productivity overall by 12 per cent., as confirmed by the National Audit Office. We have saved money in back office processing and used that to invest in the front line. So there are now 1,500 more personal advisers in Jobcentre Plus than there were two years ago. But we need to recognise that in the current economic circumstances we need to invest more in our front-line services, so we are today announcing a moratorium on Jobcentre Plus closures, and I can also confirm that the pre-Budget report will mean 6,000 more front-line staff in place in Jobcentre Plus next year.
	Secondly, we need to ensure that we reach people facing redundancy as early as possible. The Insolvency Service now informs Jobcentre Plus immediately of redundancy notifications it receives. We had already doubled the funding for our rapid response service. Yesterday, the money available was doubled again, allowing us to help all companies facing 20 or more redundancies. That service will bring people swift access to the £100 million that the Department for Work and Pensions and the Department for Innovation, Universities and Skills announced last month to help people retrain and develop their skills, so that they can move quickly back into sustainable work, like the workers at Butler and Tanner in Frome, Somerset, nearly 300 of whom lost their job when the printers closed in April this year. With the help of the rapid response service, it is estimated that 90 per cent. have now found new jobs.
	We know that local employment partnerships, which help match the unemployed to employers looking to hire, have been successful. Already more than 70,000 of our most disadvantaged customers have started work under the initiative. Now we will be able to extend that to include those who are newly redundant, too.
	We have also announced the national employment partnership. This group will be chaired by the Prime Minister and will include the heads of business and public sector bodies, with a remit to ensure that employers work with the Government to enable people facing redundancy to be moved as quickly as possible into new jobs.
	Thirdly, over the past 10 years, we have also opened up our service to private and voluntary sector providers. As David Freud recognised, that allows us to get the best of both worlds with Jobcentre Plus providing the core support and processing, and specialist providers helping those who find it hardest to get back into work.
	Despite opposition to them from some parts of this House, the new deals have been successful, but they need to become more personal to the individual rather than being based on age, so we are introducing the flexible new deal. Some concerns have been expressed about the viability of these contracts in new economic circumstances. I am glad to report that we have compliant bids from 24 organisations and we have a minimum of four organisations competing for each of the contracts on offer. But it is important that we do invest more in the flexible new deal, both to give providers confidence but also to make sure that this time people who are further from the labour market are not abandoned. Some people say that there is no point helping people furthest from the labour market in the current circumstances. We say the opposite: when times are harder, we should be giving people more help, not less.
	This Government are taking action, including action on the economy and action to help people face the effects of the global crisis. That is the right thing to do for this country, for individuals and for jobs. The £1.3 billion will help those who are newly facing redundancy and those who have been out of work for longer: more front-line staff, and more money for our private and voluntary providers, so that we can maintain our active regime. For those who have been out of work for some time, we will maintain and accelerate our overhaul of the welfare system to do everything we can to bring them back closer to the world of work. We will give more help now, to prevent individual tragedies today from becoming the scars on communities tomorrow. I commend this statement to the House.

James Purnell: That was absolute confirmation that the Tories are now the do nothing party. We are offering real help to people in difficult times. Those on the Opposition Front Bench have absolutely nothing to offer people because they are setting themselves apart from the orthodoxy around the world that we need both monetary and fiscal action now to help the economy. The right thing to do is to ensure that the problems with the economy are as short and shallow as possible, to reduce the cost to people now and to the economy in the long run. That is exactly the opposite of what the Tories did in the '80s and '90s, when they said that unemployment was a price worth paying. They wanted us to believe that they had learned those lessons, but even this week the shadow Health Secretary said that a recession
	"on many counts...can be good for us".
	We have the Conservative deputy chairman saying that the recession should take its course. The only thing that we need to know about the Conservative Front Bench is that its members have not learned the lessons of the 1980s and 1990s, when they massaged and fiddled the unemployment figures and put millions of people on incapacity benefit rather than helping them. In the middle of the 1980s, there was no requirement that people look for work. The then Conservative Government did not provide support or reform the welfare state as they should have done, but those are exactly the things that we will continue to do.
	I turn now to the points made by the hon. Member for Epsom and Ewell (Chris Grayling). He trotted out his list of figures but, as I mentioned when we last discussed these matters, they are rather esoteric interpretations of the facts. He said that more public sector than private sector jobs had been created, but that is simply wrong: three quarters of the jobs that have been created are in the private sector. He said that we had a lamentable record on employment, but we had the second-highest level of employment in the G7—second only Canada.
	The hon. Member for Epsom and Ewell said that we were not going to act on unemployment, but we are proposing a package today that his party would not have proposed in the past, and could not propose today, because it is ideologically against taking action now to help people through the downturn. The Government will act because we understand the scars that the Conservative party left on communities, and we are determined to make sure that that never happens again.

James Purnell: I can give a guarantee that we will provide the service that people need. That is our commitment. We deliver services now through Jobcentre Plus, children's centres, GP surgeries and other community settings. If there are ways in which he thinks that we should improve the service in his area, I shall be happy to listen to them.

James Purnell: The National Institute of Economic and Social Research, an independent organisation, has said that it pays for itself, and it has helped to cut long-term unemployment by three quarters. We are reforming the flexible new deal on the lines that David Freud suggested, using private and voluntary providers, giving them the freedom to innovate, and rewarding them on the basis of results. Although the Conservatives say that they are against that, it is exactly the approach that they say that they would follow as well.

George Osborne: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 24, to debate a specific and important matter that requires urgent attention, namely,
	yesterday's pre-Budget report.
	It is an absolute disgrace that the Government have not conceded a debate on this, for it was not just a report but a crisis Budget and a reckless gamble with the public finances. It introduces a £20 billion fiscal loosening and a £40 billion package of future tax increases. The VAT changes, which add £12 billion to the national debt, will come into force next Monday, before any parliamentary approval is possible and without the opportunity to raise the widespread scepticism that the public and retailers have expressed about its merits and costs. The prospect of a rise in national insurance, which the Institute for Fiscal Studies has just confirmed hits anyone on an income of over £19,000, is already damaging confidence in a future recovery. The news that the Government are set to borrow more than any Government in history, and that the national debt will double to £1 trillion, has shocked the entire country.
	If this had formally been called a Budget, there would now be four whole days of debate on it; instead, this Government refuse to have even one. They are running away from the argument, because they are losing the argument. These are the issues that the entire country is talking about, and I believe that we should be debating them in this Chamber. That is why, Sir, I seek this debate.

Dormant Bank and Building Society Accounts Bill [lords] (programme) (no. 2)

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendment No. 10A.
	May I ask Members who are not staying for the debate to leave quickly and quietly?

Rosie Winterton: Today, we enter the final stages of this landmark Bill, which will transform the saving habits of millions of people in the country. Before we begin this final debate, I should like to pay tribute to my hon. and learned Friend the Minister of State, Department of Energy and Climate Change, the Member for North Warwickshire (Mr. O'Brien), to my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) and to my noble Friend Lord McKenzie for all their stalwart work on the Bill. Thanks to their efforts, progress on this Bill has been characterised by a high degree of constructive dialogue between the Government, stakeholders and the Opposition. That consensual approach is clear in the vast majority of the amendments before us. I hope that, during this final debate, we will retain that consensus approach to a certain extent.
	On the issue of qualifying earnings, we reached a broad consensus on the way forward because of the constructive and supportive approach taken by a number of our stakeholders. Among others, I should like to thank the CBI, the National Association of Pension Funds, the Association of British Insurers and the TUC as well as colleagues in both Houses for their contributions to the debate on this important area.
	As I said, the Government have listened to the points that have been made in debate, and to our stakeholders. Amendments Nos. 21, 22, 57, 61 and related consequential amendments are designed to address concerns about the potential complexity of the band of earnings at the heart of the quality test.
	Amendment No. 61 makes it clear that trustees can change scheme rules as a route to compliance, but they still need to obtain the employer's consent to change those rules. In order to minimise the risk of levelling-down, this power cannot be used to reduce contribution levels. Amendments Nos. 21 and 22 and related consequential amendments enable employers to use an annual pay period to smooth the impact of irregular payments to workers.
	Amendment No. 57 allows employers who are confident that their workers are on course to receive the new minimum level of pension savings to certify that their arrangements meet the quality standard. That will increase clarity and certainty for employers, while ensuring that individuals' savings remain protected. The detailed processes will reflect the principles agreed with stakeholders and will be set out in regulations and guidance.
	The hon. Member for Eastbourne (Mr. Waterson) has tabled an amendment to amendment No. 57 that would remove the Government's ability to repeal the process of certification in the future. All our stakeholders have agreed that a review in 2017 is appropriate. Removing proposed new subsection (9) would mean that, following the review, we would not be able to repeal this legislation if it was felt that certification was not effective or necessary from the perspective of either workers or employers.
	Amendments Nos. 23, 24 and 25 ensure that the limits of the earnings band are reviewed annually in line with changes to average earnings, and uprated accordingly. This proposal was an Opposition amendment but we accept that it is consistent with Government policy, and that is why we have agreed to it this evening.
	Amendments Nos. 5, 12 and 15 extend automatic enrolment to workplace personal pension schemes. We always intended that automatic enrolment would apply to workplace personal pensions but concern was expressed on Report in the Commons that they could fall within the scope of two European consumer directives and that that might have prevented automatic enrolment into the schemes. Happily, when the Bill was introduced into the other place and following discussions with the European Commission, we were pleased to be able to announce that that would not be the case. That puts provision by the insurance industry on a level playing field with other provision, and it was warmly greeted by all our stakeholders.
	Amendments Nos. 28 to 32, 41 to 46 and 57 make technical changes to the scheme quality requirements to ensure that the widest range of schemes can qualify. Other amendments in this group are minor and technical in nature and are entirely consistent with the overarching policy. I therefore commend the amendments to the House.

Nigel Waterson: It is a great pleasure to be debating the Pensions Bill again as it moves majestically towards the statute book. As the Minister kindly said, it is good to see the hon. and learned Member for North Warwickshire (Mr. O'Brien) in his place. He is clearly a sad person because he cannot keep away from pensions, despite his huge new responsibilities in the energy field. I suppose we will have him to thank if the lights do not start going out in a few years' time.
	I join the Minister in thanking all the stakeholders that have been part of the process. She listed some organisations, and even more have been involved. For the real enthusiast, there have been any number of seminars, get-togethers, conferences and events to try to get the thing right. The Opposition are not wholly convinced that there is not a series of unanswered questions, but those questions are for another day.
	It is interesting that the Government still have what I might describe as a schizophrenic approach to saving for retirement. Only yesterday they announced—well, they quietly slipped through—a further £2.3 billion stealth tax on private pension pots. Of course, at the moment they are trying to give people in this country two different messages. One is that the problems that have got us here have included borrowing too much and saving too little. The other is that they are to provide a fiscal stimulus that they would like us all to take down to the shops immediately and spend.
	We face a huge number of amendments from the Government and just a sprinkling from the Opposition—ones on which the Government were defeated in the Lords or that the Government were good enough to accept. To that extent, there will be a reasonably pre-festive season air about this evening. Having said that, the Bill is not in the same league as the Pensions Act 2004, to which there were more than 1,000 amendments, so perhaps things are getting better—even though we still have an awful lot of amendments on our plate this evening.
	I pay tribute to my colleagues in the House of Lords. Lord Skelmersdale and Baroness Noakes made a huge contribution to improving the Bill in the Lords, sometimes with the co-operation of Lord McKenzie, the Minister in the Lords, and sometimes without. They have made some major changes and a lot of minor ones, some of which I will not necessarily have time to touch on this evening, but on the whole considerable improvements were made to the Bill. I also pay tribute to those who served on the Committee in this House. It was a model of amity, co-operation and consensus, as far as that goes.
	It is worth mentioning a couple of issues before I go into the detail of the first group of amendments. We have been allocated three hours for five groups of many amendments. Life being what it is, the fifth group relates almost entirely to an issue that has not yet arisen in the House—regulation of buy-outs of pension funds. It would be a huge tragedy if we did not reach that group in the time that the Government have allocated to us this evening.
	On the first group, I intend to be even more selective than the Minister in the amendments that I want to speak to. As she rightly said, there are many technical and minor amendments and I do not see any purpose in labouring them in any detail. The central issues are clear. They are mainly concerned with the concept of automatic enrolment. My party has been convinced on that matter in the pensions field for longer than any other party. Indeed, it was our policy before the last election. It is important to recognise that in many ways we are all slightly mesmerised by the architecture—the design—of personal accounts, but the more important issue is auto-enrolment. The top prize is to auto-enrol people into existing pension schemes that have much more generous provision than the overall 8 per cent. contribution envisaged for personal accounts. It is important to remind ourselves of that as we get into the detail of the amendments.
	As I said, many of the amendments bring simplification, clarification or rationalisation to the original draft of the Bill, and I want to make some observations on some of the amendments before I talk to our amendment (a) to Lords amendment No. 57. The first issue principally revolves around Lords amendments Nos. 23, 24 and 25, which the Minister touched on. They were moved by Baroness Noakes and are designed to ensure that the Secretary of State does not in future let the value of the earnings threshold for personal accounts fall behind increases in the level of earnings generally.
	There was one of those bizarre exchanges in the Lords in which the Minister, Lord McKenzie, was clear that it is, and was, the Government's policy to uprate the earnings band in line with earnings. However, that was not in the Bill. As originally drafted, it appeared to give the Secretary of State carte blanche to decide how and when to revalue the band. Lord McKenzie talked about needing flexibility. He said:
	"We always have this dilemma where we have a clear policy and objective and believe that uprating by earnings is the right way forward. However, given that we are setting down reforms for decades to come, there must be a strong argument in favour of flexibility."—[ Official Report, House of Lords, 23 June 2008; Vol. 702, c. 1267.]
	I do not regard that as a dilemma. If the policy is clear, why does the legislation not follow it? In the event, that argument did not persuade Baroness Noakes or, indeed, their lordships, because it went to a vote and the Government were defeated. I thank the Minister of State for graciously accepting that the amendment should stand.
	The main issue—and it is very important, for reasons that I shall describe—revolves around Lords amendment No. 57 and amendment (a). Amendment No. 57 allows for what is called self-certification in respect of the qualifying earnings rule. That is a complex but important matter. It is clear from the design of personal accounts—we accept this as a principle—that if one is introducing auto-enrolment either into an existing scheme or to personal accounts, there has to be a mechanism whereby it is proven that the terms of the existing scheme are at least as beneficial to the employees as personal accounts would be. All the evidence from organisations such as the National Association of Pension Funds is that existing schemes will overwhelmingly be much more generous in terms of the employer contribution than will personal accounts.
	Perhaps this is more of a theoretical than a practical problem. However, it is clear that there has to be a test of some sort—the qualifying earnings test—and it has to strike a balance between two different things. One is, of course, to protect employees' rights. That must be clear. The other is the real need for the test to be as easy, cheap and straightforward as possible for employers to operate. We do not need another complex regime—a third regime—sitting alongside PAYE and national insurance as an extra burden on employers.
	I pay tribute to the industry's working group, whose views I shall come to in a minute, because it has worked so hard with officials over many months to get the right answer. Indeed, I think that it is still working with them. The group includes organisations such as the Association of British Insurers, the CBI, the Institute of Chartered Accountants, the Society of Pension Consultants and the National Association of Pension Funds. Its concern, which is the same as ours, is that if the test is not simple, cheap and straightforward to operate, it could encourage the process of levelling down, whereby the introduction of personal accounts—apparently in 2012, which we might discuss that later—would give an extra impetus to employers to close their existing defined benefit schemes and point their employees in the direction of the Government-backed personal accounts. We strongly believe that every possible measure should be taken to try to discourage that process, because otherwise there could be the nightmare scenario in which many people are disadvantaged by ending up with personal accounts rather than existing, and much more generous, company schemes. We share the concern that the test, as applied in practice, could assist the process of levelling down. I shall come to the views of those key stakeholders.
	The current position could fairly be described as a work in progress. There have been discussions, and there were more discussions with the industry working group over the summer. The Government have moved somewhat by accepting some of the principles that would make the process simpler but, in fairness, there is still some way to go on the detail.
	The next step, as I understand it, is the publication of detailed regulations on the qualifying earnings test. We and, indeed, the industry will look very closely at just how the regulations are drafted, and if we do not get the drafting right at the next attempt, an incoming Conservative Government would certainly wish to revisit it as a matter of urgency.
	I turn to the concessions that the Government made on the subject in the House of Lords in early November. In a letter, Lord McKenzie cited the efforts of the stakeholder group led by the ABI, conceded that there should be a self-certification procedure, which we welcome, and said that
	"employers will not be required to make retrospective reconciliation payments if contributions unexpectedly fall short, unless the detriment to an individual exceeds certain de-minimis levels",
	and that the levels will be set in a way to stop detriment to particular individuals. That was a major step forward, because the Government undertook what Lord McKenzie described in his letter as
	"a departure from the policy of an individualised test".
	He said:
	"In developing this approach we have sought ways to increase clarity and certainty for employers going forward, without opening up the risk that some individuals find themselves regularly or materially losing out"
	and he talked about getting the balance right. The Opposition still think that, despite all the best efforts, the balance is not quite right, but I am prepared to concede that everyone is doing their best to try to reach the right answer.
	In its briefing for this debate, the CBI expressed the concern to which I have referred: that the original test, as drafted, could contribute to levelling down. It also said how important self-certification is. The self-certification point has now been conceded, and that is important. However, the CBI goes on to say that
	"employers and pensions industry professionals alike were very concerned about maintaining high quality existing provision in the face of an impractical qualifying test that defines pay in a way that does not meet the current market standard. The costs associated with complying with this definition would provide an incentive to level down into Personal Accounts."
	That is the nub of the issue. What was originally proposed departed from the standard current industry practice, so it needed to be tackled urgently. The CBI continues:
	"The self-certification approach ensures firms need not take on significant administrative costs, without affecting the levels of contribution made to their scheme...We strongly support amendments to introduce self-certification, which is a robust but less burdensome approach.
	In addition, we acknowledge the move to annual reconciliation as a major—and very welcome—step toward simplification."
	The Association of British Insurers, which has been leading on all the issues relating to the earnings test, had this to say in its press release of 6 November:
	"we, along with other industry groups, remain concerned that the wording of the key amendment to the Pensions Bill on self-certification may not achieve these aims"—
	that is, the aims of simplicity and so on. The association goes on:
	"The current drafting of the amendment adds considerably to the administrative burden for employers and risks discouraging them from continuing to provide pensions to their employees that have higher contributions than the level set for personal accounts."
	It says that it hopes that the issue can be resolved and makes it clear that it is prepared to carry on working with the Government on these matters. That is encouraging.
	I look to the Minister for an absolute assurance that, just because the Bill is passing into law any time soon, she and her Department will not lose interest in the nitty-gritty work that still needs to be done on the qualifying earnings test. As the Minister pointed out, my amendment (a) would remove subsection (9) of the new clause in Lords amendment No. 57. It is important that we make that stand, because it seems to me that the current position is as follows. By dint of a lot of hard work by officials and stakeholders, we have made significant progress. Further progress needs to be made on the regulations, and I hope that it will build on the discussions that have already happened.
	I am totally bemused by why the Government now want to put into the legislation what is effectively a proposal to go back to square one some time in the future. We are deeply suspicious of that proposal. We see no need for the power in subsection (9), which enables the Secretary of State to repeal the whole new clause by order.
	We will talk at some point about the question of a review after five years of personal accounts, but if something cataclysmic occurred in the context of personal accounts and of the qualifying earnings test and how it applies, I am sure that the Government of the day would wish to get to the bottom of the problem through primary legislation. That would be fair enough. I commend amendment (a) to the House, and subject to any further comments from the Minister on the issue, we will press it to a Division.
	The final issue—I appreciate that to some extent I am cherry-picking the really important issues from this huge number of amendments, which are not of our making, as I explained—is one that the Minister has already touched on, which concerns auto-enrolment into workplace personal pensions, or WPPs. That was a major concern during the passage of the Bill in our House and is a matter of huge worry to organisations such as the ABI. In fairness, there is a great deal of consensus about it. I remember having private discussions with the then Minister, the hon. and learned Member for North Warwickshire, on how it could be sorted out. Lord McKenzie recently emphasised the importance of doing so:
	"Workplace personal pensions are an important and growing part of the pensions market. Membership of workplace personal pensions is around 47 per cent of current private sector pension membership, which represents about 3.3 million employees, involving total contributions of £6.7 billion a year."—[ Official Report, House of Lords, 17 June 2008; Vol. 702, c. 957.]
	He said that it had always been the Government's intention to include WPPs within the scope of this legislation, but there were concerns from a legal point of view that they would fall foul of the European directives on distance marketing and unfair commercial practices.
	In our discussions with bodies such as the ABI—I am sure that there were similar parallel discussions with Ministers—they were very worried that if some clarity were not sought and obtained as a matter of urgency, that could stop in its tracks the healthy growth in WPPs throughout the British workplace. The good news is that the European Commission has now confirmed in writing that it takes the same view as the Government, and this group of amendments reflects that positive outcome. Let us hope that that exchange of letters with the Commission is enough to ensure that there is no future legal challenge on this issue. As far it goes, it is good news for those who were concerned about the Bill's unintended effect on WPPs. It now seems clear that WPPs can be used to discharge the duty on employers to operate an automatic enrolment system. I very much welcome that, as does, I am sure, everybody involved.
	Those are our concerns arising out of this group of amendments. I have argued for amendment (a). Let me leave the House with this thought, which is again to emphasise the huge importance of automatic enrolment in this legislation and for the future of British pensions. That is so much the case that a few days ago the ABI issued a statement asking for it to be dealt with in the pre-Budget report; I am afraid that it was disappointed. It says in its press release:
	"Automatic enrolment into workplace pensions, which is due to begin in 2013, should be brought forward and introduced as soon as possible. If it were to start in 2010, it could lead to additional long-term savings in excess of £500 million by 2012."
	Earlier today, I spoke at the ABI's savers conference, where that proposal was again made. At the end of its press release, it says:
	"The Government has a golden opportunity to boost workplace pension saving by enabling automatic enrolment now. The pensions industry, employers and the rest of the private sector is ready to deliver auto-enrolment as soon as the green light is given."
	It would be interesting to have some indication from the Minister as to whether that forms any part of the Government's thinking. Beyond that, I have nothing to add, and I look forward to any further comments that the Minister might have.

Paul Rowen: I join others in congratulating those in the other place on all their hard work. I especially congratulate my colleagues, Lord Oakeshott, Lord Kirkwood and Lord Thomas, and hon. Members here on the work they have done on a mammoth Bill, which is now coming to a close.
	In her opening remarks, the Minister rightly commented on how, during the passage of the Bill, we have maintained a broad consensus, which is important for stability and long-term development. This group of amendments— 101 are included, the majority of which the Government introduced—shows that many of the issues and concerns raised during the Bill's consideration here and in the other place have been listened to, and I welcome that.
	As the hon. Member for Eastbourne (Mr. Waterson) said, auto-enrolment is the key to the success of the scheme. We are talking about between 4 million and 7 million people being enrolled, and upwards of £170 billion being invested. That is investment of a size and order considerably larger than what has been achieved in other pension schemes. It is a mammoth task, and ensuring that auto-enrolment is made straight-forward and effective is going to be the key to the success of the scheme.
	Amendments Nos. 9, 10, 11, 13 and 14 clarify the fact that re-enrolment will not apply if a job holder stops saving or opts out within a prescribed period before re-enrolment is due. The amendments set out the timings in more detail. Although we see their necessity, I say to the Minister that we do not want to go down the New Zealand route. It has seen a 30 per cent. drop-out rate on the quick saver scheme. Auto-enrolment is crucial to the Bill's success and we need to ensure that the Government support employers as much as possible to ensure that re-enrolment is a consistent policy.
	I agree with the hon. Member for Eastbourne about auto-enrolment for workplace pension schemes. That element was missing from the pre-Budget report statement yesterday, and I hope that the Minister, when she responds, will give us some idea of when, or if, the Government are considering bringing the date forward. Given the amount of work that has to be undertaken to set up the scheme, the more of the other things that we can get done earlier, and the more we can encourage people in existing schemes to auto-enrol, the better.
	I am pleased that the Minister has said that she accepts amendments Nos. 23, 24 and 25, which deal with the value of the earnings threshold and ensure that it does not fall behind the increases in the level of earnings. That is critical to the success of the Bill and to ensuring that people have a pension commensurate with what they need to live on when they retire. We know what has happened to the state pension. The Government have not given a commitment to restore the earnings link by a set date, and as a result many pensioners are in poverty or are having to apply for pensioner credit. If we are to have a scheme, it is far more preferable to ensure that it keeps up to date with increases in earnings. That is critical. I hope that the Minister will say when she is going to restore the earnings link to the state pension. That measure could have been introduced in the pre-Budget report.
	I congratulate the Government on what they have done in amendments Nos. 5, 7, 13, 16, 21, 30, 31, 55 and 134 to permit workplace personal pensions to be used for auto-enrolment. When the Bill was discussed earlier in this House, the major concern was that the auto-enrolment of workplace pensions could have been outlawed by two EU directives. Again, I am grateful for the work that the Department has done to ensure that that is not the case and that the auto-enrolment of workplace pension schemes can continue.
	We support the Conservatives in their amendment (a), which stands in the name of the hon. Member for Eastbourne, to Lords amendment No. 57. We are grateful that the Government accepted Lords amendment No. 57, because it is vital that existing schemes and the duties placed on employers are made as easy as possible. Having a self-certification scheme that does not set unnecessary conditions is critical to the retention of those existing schemes. We have made the point all along that we did not want the Bill to be used as a levelling-down exercise for existing pension schemes, and the amendment would at least ensure a mechanism that would enable employers to comply with their duties satisfactorily. However, the Minister said that she had agreed with stakeholders that there was going to be a review in 2017.
	I accept that. However, in the other place, Baroness Noakes questioned the need to allow the Secretary of State automatically to sweep the provision away. She did not receive a satisfactory answer, so I hope that the Minister will give us one today. Our view is that if such a major change—one that could affect existing pension schemes—is to be contemplated, it should be the subject of primary legislation. So far, the Government have taken all the various groups with them—stakeholders and the parties in this place. I would not want the change made possible by Lords amendment No. 57 as drafted to be made, so I hope that the Minister will reconsider her position. It is not a pressing issue—the Government will not fall if amendment (a) is accepted and it will not materially change the workings of the Bill—but in the long term, people would be given the satisfaction of being listened to.
	Lords amendment No. 159 deals with the director of a corporate body not counting as a worker. Again, that seems to be a sensible amendment and we support it.

Julie Kirkbride: I, too, welcome the Minister to her new role. Picking up a complicated Bill after Committee, Report and Third Reading cannot be the easiest thing to do. However, as other hon. Members have said, there has been constructive engagement among all the parties—the parties in this House and stakeholders outside—on the way forward for these measures, as well as broad cross-support, because we need to increase pension saving across the nation. It is therefore reassuring that that engagement has continued.
	However, I would like to echo the concerns that have been expressed. If there has been one disagreement among the political parties, it is the prospect of those of our fellow citizens who have a better pension scheme than that which will be offered under the Bill finding their scheme being levelled down. Once the provisions come into force, there will clearly be a temptation for employers to look again at what they offer and to contemplate having all their employees—or at least all their new employees—on a scheme that complies with the standards of the Bill, rather than on the scheme currently in place.
	I sincerely hope that the Minister will take into account the concerns that have been raised about having a self-certification scheme, so that there will not be any payroll issues relating to the administrative costs of the new measures. My particular worry, given the debate so far, is that the Minister wants to be able to strike out what is good in the Bill by ministerial decree, rather than through further debate in the House. Employers want reassurance on this issue, and will not want to think that the self-certification provision can be taken out by ministerial decree, because that will add to the de minimis situation. We need to hear some good reasons why the Government's way forward is a good one, because the sanctions for employers who do not fully comply and co-operate include imprisonment.
	Yesterday, we heard about the seriousness of the economic situation facing the country, and the Bill will add further pressure for employers, who will also face a national insurance increase around the time the Bill comes into effect. The pressures on them will be considerable, and the maximum reassurance that the House and the Minister can offer will be appreciated. I look forward to hearing her arguments, which might be in agreement with Conservative arguments.

Rosie Winterton: First, I thank the hon. Members for Eastbourne (Mr. Waterson), for Rochdale (Paul Rowen) and for Bromsgrove (Miss Kirkbride)—I know that the hon. Lady was also on the Committee—for their points about consensus, which has been an important part of our debates.
	The hon. Member for Rochdale spoke about earnings upratings. We have certainly made clear our commitment to introducing an earnings uprating of the basic state pension. Our objective, subject to affordability and the fiscal position, is to do that in 2012, but we want to do it by the end of the next Parliament at the latest. We will make a statement on the precise date at the beginning of the next Parliament. I assure the hon. Member for Eastbourne that we will not lose interest in this issue just because the Bill is passing into its final stages. I look forward to having many discussions with him and his colleagues in the coming months and years about the various regulations and about the detail of issues such as qualifying earnings.
	As both hon. Gentlemen said, we have had discussions with the European Commission about bringing forward the workplace personal pensions. We are well aware that the industry wants to proceed with automatic enrolment before the planned introduction of the duties from 2012, but the relationship between the employer duty and automatic enrolment makes it difficult to do that outside of bringing in the general scheme. However, we are keen to find ways of helping employers and providers to increase participation in personal pensions today and to make the transition from active joining to automatic enrolment, under the employer duty, as soon as possible. There will be many more discussions on this issue, but there will be firm encouragement for people to participate in the schemes.
	I hope to persuade the Opposition to withdraw their amendment. I hope also that the hon. Member for Rochdale will take note of the points that stakeholders have made on certification in what has been a constructive process. We have agreed to review the effectiveness of the certification procedure in 2017. As hon. Members have said, it is designed to make it easier for employers to cope with the new arrangements for workplace pension saving, using their existing provision. We hope that that will go some way towards reducing the risk of levelling down, but there is a possibility of certification leading to unintended consequences for the employer or employee. We must make sure that individuals do not routinely save at levels below those recommended by the Pensions Commission. Also, employers might become more inclined to use the quality standard without certification, thereby making the procedure redundant.
	It would be absurd for the House to rule out, at this stage, the possibility of removing certification if there were widespread consensus in 2017, through a review, that that needed to be done. It would not be appropriate then to have to wait for more primary legislation. I urge the Opposition to withdraw their amendment. There are good reasons why we have made the changes that their amendment would completely undermine.

Rosie Winterton: The Bill introduces an effective and proportionate compliance regime which is vital to the success of our reforms. The amendments strengthen the regime in several key areas, and respond to concerns raised earlier in the Bill's passage.
	Lords amendment No. 95 would enable the regulator to require employers to pay interest on unpaid contributions, which would help to ensure that members did not lose out because of contributions not made on time. In Committee in the House of Commons, concerns were expressed about a small minority of employers who might be tempted to try to induce their workers to opt out of scheme membership. Those concerns were shared by several stakeholders, such as the TUC, the Equality and Human Rights Commission and Age Concern. Lords amendment No. 135 would prohibit such behaviour, while Lords amendment No. 132 allows the pensions ombudsman to investigate complaints relating to a jobholder opting out of a pension scheme.
	We have also closed two possible loopholes in the proposed criminal offence of wilful failure to comply. Lords amendments Nos. 112 and 113 introduce a criminal offence for individuals who may be responsible for such failure to comply within bodies corporate, unincorporated associations and partnerships.
	Lords amendments Nos. 105 and 108 make clear that the effect of a notice issued by the regulator—for example, a compliance notice—will be suspended until any review of or appeal against the notice is completed. Lords amendment No. 201 gives the regulator greater flexibility to delegate the functions associated with the compliance regime, so that it can fulfil its new role in the most efficient and cost-effective way.
	The remaining Lords amendments were introduced for technical reasons, or to clarify drafting. For instance, Lords amendments Nos. 69 to 75 and 80 would ensure that the regulator could exercise his powers in relation to a job holder's previous employers.
	The Bill sets out an effective regulatory regime to underpin the reforms. The Lords amendments have strengthened and improved that regime, ensuring the best possible level of protection and fair treatment for both workers and employers, and I commend them to the House.

Rosie Winterton: I thank the hon. Members for Eastbourne (Mr. Waterson) and for Rochdale (Paul Rowen) for their support for the amendments. The hon. Member for Rochdale raised a couple of points that I wish to address.
	The costs will depend on the detail of the operational design of the compliance regime, but officials at the regulator are currently developing cost estimates both for provision of the compliance regime by the regulator and for perhaps delegating or contracting out elements of the regime, which is permitted under the Pensions Act 2004. That will inform the regulator's decision about how to deliver the service.
	On the wider issue of funding, the pension regulator's extended role will clearly be central to the success of the reforms. We are committed to supporting the regulator in that. We have said that set-up costs for the compliance regime will be funded by way of grant in aid, and we are currently considering how ongoing compliance costs would be funded.
	It is important that we work with small employers to ensure they are aware of what their obligations will be, and the Government certainly intend to make sure that there is consistent and coherent information to support the introduction of the reforms by helping to raise awareness.
	I take on board the disappointment expressed on issues to do with personal advice to each individual. We want to make sure that the information that people need is targeted, so it is relevant to individual circumstances.
	I commend the amendments to the House.
	 Lords amendment agreed to.
	 Lords amendments Nos. 68 to 138 agreed to [some with Special Entry] .

Rosie Winterton: I thank the hon. Members for Eastbourne (Mr. Waterson) and for Rochdale (Paul Rowen) for their general welcome for these amendments.
	On the 2017 review, our commitment is to commission a review of just two of the features of personal accounts—the annual contribution limit and the prohibition of transfers to and from the scheme. We think that a focused review will be the most straightforward way to meet our commitments in those areas, focusing on the impact of the policies on employers, the pension industry and individual behaviour. The review would examine outcomes in the light of the wider debate on existing pension saving. However, it would be too early after 2012 to commit to a wider review of the reforms, given the phasing in of some features and the long-term nature of pension saving.
	With regard to the amendment tabled by the hon. Member for Eastbourne, I stress again that we have no intention of unfairly advantaging the scheme, and we have not discounted the possibility of commercial rate loans. However, in light of the unique task that we are giving the scheme, and ahead of knowing more about its costs through the procurement process, it is vital that we retain flexibility in how it is funded. Like any other scheme, personal accounts will be targeted on a particular segment of the market. The scheme will also have a public service obligation to accept all eligible employees, irrespective of whether they are loss-making to the scheme.
	In the long term, we are confident that the scheme can do that while delivering low costs to members and being self-financing, but in the short term those obligations will add to the challenge of establishing a low-cost scheme. If that is the case, it would be reasonable for the Government to consider whether it was in the public interest to compensate the scheme in some way for the burdens placed on it. Indeed, European state aid rules, whose explicit purpose is to prevent anti-competitive behaviour, recognise that there may be cases in which it is right to compensate a body for performing a public service obligation. These rules are very explicit: it is possible only for the state to recognise the cost of imposing a public service obligation, and it is not possible to go any further. In other words, it is only possible to ensure that the personal account scheme is not disadvantaged by its public service obligations. Therefore, not only do we not want to subsidise the scheme unfairly, but it would be illegal for us to do so. I hope that, with this reassurance, the hon. Gentleman will agree not to press his amendment.

Nigel Waterson: I shall try to tailor my remarks, because although this is an important group of amendments, which deals with some important issues, we are subject to time constraints—which, of course, were imposed by the Government.
	I join the Minister in thanking everybody who made going through this process such a huge amount of fun. There is no physical similarity, but the Minister slightly reminds me of Marshal Blücher arriving in the early evening of the battle of Waterloo, just in time to bayonet the wounded. The Minister has arrived in the nick of time and is here to take the victory parade, as it were.
	Lords amendment No. 198 and related amendments are about the important issue of buy-outs. It is hugely important to get that issue right. Initially, I am afraid, the Government got it horribly wrong. Our position has always been clear: yes, the business models for buy-outs of pension funds have run ahead of the legislation and the regulation, so something needed to be done. However, we did not need to throw out the baby with the bathwater. For some people in some pension funds, a properly regulated and financed buy-out would give an element of security that they would not otherwise have—and, incidentally, would allow the sponsoring company to get on with its core business instead of spending all its time worrying about running the pension fund. That is our position, and we have never wavered from it.
	Initially, when the Minister's predecessor approached me about the potential concerns about the issue, I said that we were happy to give our general support, subject to seeing the detailed legislation. The then Minister made a statement in April about his intentions, thereby stopping any unsuitable deals in their tracks. With the permission of the Attorney-General, he made it clear that the provision would be retrospective, and we had no difficulty with that.
	We parted company with the Government when they introduced in the Lords a wide regulation-making power to deal with the issue, without putting any detail in the Bill. That caused huge debates in the House of Lords. The Government forced it through before the summer. However, I am pleased to say that during the summer, wisdom prevailed; organisations such as the CBI, the British Venture Capital Association and others made it clear that if the Government were not careful, and overdid things, they could jeopardise genuine turnaround situations and legitimate business models that give the security to which I referred earlier.
	In the event, that argument was won; the Government staged a more or less graceful climbdown. Huge thanks must go to my colleagues Lord Skelmersdale and Baroness Noakes in the Lords. The Government tabled a series of detailed amendments for discussion and debate, including more sensible defences, a new alternative test for the use of the contribution notice power, a list of factors to guide the regulator and a code of practice. The proof of that particular pudding will be very much in the eating, but we have now reached a more sensible solution to a problem that was perhaps being overstated. Now we may have the powers just about right; I hope that they will be used with considerable discretion, care and caution.
	I am not saying that the pensions regulator is like the police, who always want more powers, but we need to be careful about simply giving more and more powers to the regulator if that is likely to upset the delicate balance in situations where a rescue could be staged, and if it is likely to tip companies that could have been rescued, along with their pension schemes, into the arms of the PPF. Now we have the "reasonably foreseeable" test and other details that are broadly satisfactory. In its brief for this debate, the CBI said that it
	"worked with government to develop effective, targeted powers sought by the Pensions Regulator to properly regulate non-insured pensions buy-outs, while having a limited effect on the normal course of business for the vast majority of employers that sponsor a defined benefit scheme."
	That is absolutely right; indeed, the business models may well change further over time and it is important that we keep monitoring them as they do.
	Let me refer briefly to amendment No. 256. The lump sum from the PPF for progressive illness when death is likely within six months is an important provision. Amendment No. 194 and others concern the financial assistance scheme. I will not dwell on the long and painful process of getting the Government to face up to their responsibilities following the ombudsman's report, but we welcome the extension of the FAS to schemes that were previously excluded.
	Another point about the FAS as regards payments for those with illnesses concerns the test being applied people expected to die within five years. The ubiquitous Dr. Ros Altmann points out:
	"By definition, if some have an 80 per cent. chance of living beyond 5 years, then 20 per cent. of them may well die in less than that time"
	and therefore be excluded from assistance. She argues for more discretion. I hope that the Government will have another look at that in the light of the representations made by Dr. Altmann and no doubt others.
	These will be my valedictory few sentences on this Bill. On amendment No. 197, I pay tribute to Lord Fowler, who spoke very clearly on the issue of annuitisation. Our position is well known. We do not see why we should be the only country on the face of the planet that has compulsory annuitisation. This week at the ABI conference, I was heartened that Otto Thoreson made supportive remarks about scrapping compulsory annuitisation. We recently urged the Government at least to loosen the rules temporarily during the turmoil in the markets, but they were unwilling to do so. In the long term, this must be addressed, and if this Government will not do so, then we will.

Peter Kilfoyle: It is a pleasure, Madam Deputy Speaker, to be in the Chamber under your strict invigilation. I know that you will make sure that we stick to the subject in this amply timed debate, as it has turned out. It is a rather arcane subject for most people, but it is certainly on the record, because I bob up every few years to have a debate on it.
	I am extremely pleased that the Under-Secretary of State for Justice, my hon. Friend the Member for Liverpool, Garston (Maria Eagle)—my neighbour and a fellow Liverpool MP—is to answer on behalf of the Government. She not only knows about the kind of environment to which I will refer, but has been a practising lawyer in the city of Liverpool and is therefore well versed in some of the nuances of the characters who play a role in this saga.
	Back in 1996, when the then Home Secretary set free two vicious career criminals just 11 months after they were sentenced to 18 years in prison for drugs offences, considerable concern was expressed—not just in the city of Liverpool, I hasten to add, but in this place. Indeed, I remember one hon. Member, now Lord Carlile, demanding a statement from the then Home Secretary. I mention Lord Carlile in particular because some years later, as a barrister, he defended one of the two principals in this case, John Haase. As I say, Lord Carlile was not the only person to express concern, and neither was I; there were many others, including many hon. Members, journalists and people in the city of Liverpool who knew that something was radically wrong if two such vicious individuals could be allowed the sort of remission that they had obviously been given.
	Let us note that their release, when it came, was at the fag end of the parliamentary Session, as Members went off on summer recess, going away on holiday or whatever. When I discovered that John Haase and Paul Bennett had been released, I was at home in Liverpool. In fact, I was about to leave my home to go on Sky TV to excoriate the Government of the day for releasing these people when I received a telephone call from the then Home Secretary in which he advised me not to do the interview. He told me that if I did so, the two people in question—the two informants, as they came to be known—would have their lives put at risk. That may seem an irrelevant argument from 12 years ago, but it came to have a strong bearing on what happened just a few weeks ago.
	Obviously, I took the then Home Secretary at his word. Although I was on the Opposition Front Bench at the time, I deferred to the privileged information that the Home Secretary of the day had. As a precautionary measure, I rang up the shadow Home Secretary, who at that time was of course my right hon. Friend the Member for Blackburn (Mr. Straw). I told him what had transpired because I thought it remarkable; I just wanted to put it on the record. As the summer wore on, and I heard more reports, I became more and more concerned about the release, to put it mildly. If the lives of the two individuals—Haase and Bennett—were at risk, they were oblivious to it. They were back on the streets practising their criminal arts, and they were involved in a whole range of criminal activities. Eventually, in 2001, Haase went back into prison on gun, money laundering and drugs charges. His partner in crime and nephew, Paul Bennett, went on the run, and it was not until relatively recently that we were able to locate him and get him back.
	A campaign started at that time that brought us to today's debate, 12 years later. The reason why is simple: on 19 November, John Haase received 22 years, and Paul Bennett 20 years, for conspiracy to pervert the course of justice—the very charge that I first brought to the attention of this House on 7 March 2001, and which I repeated in a debate on 21 May 2004. It was blindingly obvious to me what had happened, but it seemed as though various agencies of the state did not recognise what was obvious. I have to exempt some individuals from that. Some people in various agencies were equally concerned, but the agencies themselves seemed almost powerless to do anything about the situation.
	The truth was that the agencies did not want to do anything about the situation because it was a tremendous embarrassment to them. Not only was it an embarrassment to them, but what had happened in the course the conspiracy meant that everyone was a winner. The police were winners because they took huge numbers guns off the streets of Liverpool. The customs were winners because they were lifting up to 50 kg of heroin at a time, and they were disrupting the supply rings feeding the heroin trade in the UK. They were winners. It turns out that the Prison Service seemed to be a winner, because it discovered a gun in Strangeways prison thanks to information conveyed by Haase. Everybody seemed to be a winner. Of course, that was not true: the criminal justice system was a tremendous loser because of what was going on.
	I brought the matter to the attention of not only the House, but various Ministers. I brought it to the attention of my right hon. Friend the Member for Blackburn when he was Home Secretary and nothing happened. I took it to my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) when he was Home Secretary, and nothing happened. It would be remiss of me not to give credit to my right hon. Friend the Member for Norwich, South (Mr. Clarke) and his then junior Minister, my hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins), because when I took it to them, I am happy to say that some action did follow. That action gave me an opportunity, but it would not have happened except for their intervention.
	I felt that many hours and years of personal effort were being wasted as I spoke to Minister after Minister. I tabled questions, had debates, parlayed with journalists and tabled early day motions—all apparently to no avail. But it was not to no avail, in fact. I was building up a body of evidence, ably assisted by an investigative journalist supreme, Graham Johnson, and I built up a case that was irrefutable, as we found when we got the police involved.
	To return to the Clarke-Goggins regime in the Home Office, however, the opportunity that they gave me was simple. If I could prove a prima facie case to the chief inspector of constabulary, the issue would be revisited. I am happy to say that the chief inspector agreed that there was a prima facie case, and as a result, Operation Ainstable was launched. It was set up within the Metropolitan police in order that the matter could be thoroughly investigated by someone outside the original investigation.
	It would be wrong of me not to mention what an excellent team was put together for Operation Ainstable. It was ably led by Dave Johnstone and Graham McNulty. The members of the team did a thoroughly professional job. They covered a complex history with extremely dated records. Nevertheless, the application, experience and knowledge of those members of the Operation Ainstable team shone through. As the process went on and on, their work made an ultimate conviction inevitable.
	Why then, one might ask, am I back in the Chamber tonight? Why am I not happy that these two career criminals are where they belong—banged up in a category A prison? It is because that is only part of the story. A much fuller explanation is owed to Members of this House and to the public as to how such a corruption of the criminal justice system could take place. I know that the two principals have received heavy sentences, and I know that the initial travesty of their release has been corrected, but all of the other questions must be answered by someone at some stage. I shall give the House a couple of examples.
	It is staggering to me that between 1992 and 1996, the royal prerogative was exercised in 176 different cases. These proceedings take place behind closed doors; we do not even know that they are happening. What brought the Haase-Bennett case to my attention, and through me to the attention of those who also became concerned—it is whereby we ultimately got these convictions—was their arrogance. They were so arrogant, they thought that they could swagger around the streets of Liverpool at their old trade and nobody would notice, or at least nobody would get at them. If they had done what the judge in the original trial believed they were going to do, which was to change their identities and go to South America, nobody would have known what had happened. Nobody would have had a clue, and I wonder in how many other cases that remains so because of the secrecy that obtains in the exercise of the royal prerogative.
	I should point out that the figures I mentioned covered the period from 1992 to 1996, and they dropped between 1997 and 1999. But the process started again, involving five prisoners between 2000 and 2002. Those are not the huge figures of earlier years, but we are still oblivious as to what is going on with regard to the exercise of that prerogative. We do not know what conditions are laid down or what deals are being done. In such cases, we are often talking about supergrasses. The supergrasses are well versed in subverting the system for their own ends.
	That corruption of the system has happened before and it will happen again. There was a famous case back in 1979 in which Judge Michael Argyle attacked the supergrass system. He was talking about two supergrasses named David Smith and George Williams. Many people thought at the time that measures had been taken to ensure that the kind of failings in the supergrass system that had been exposed would not be repeated. Sadly, they were repeated.
	Generally, when people talked about how supergrasses were treated, they meant in a policing context. However, the context is entirely separate when it comes to Customs and Excise. For example, only in recent days I have discovered by reading through Home Office material that I obtained under a freedom of information request, that powers analogous to the exercise of the royal prerogative are vested in Customs and Excise. I was completely unaware that Customs and Excise could mitigate sentences—I have mentioned it to a number of senior police officers, and they did not know exactly what those powers were, either. Not only would we not know how the royal prerogative was being exercised; we would not know how the powers of Customs and Excise were being exercised. Where those powers would be exercised today is anybody's guess—whether through the Serious Organised Crime Agency or the UK Border Agency, or in conjunction with the Revenue I just do not know—but the powers are there and they have been used.
	I am particularly alarmed that the handler in the Haase-Bennett case was a customs officer, not a police officer. It was shown in a previous case in the early '90s—it is known as the Charrington case, because it involved an informer called Brian Charrington—that there was a certain enthusiasm in customs for protecting informers. In that case, a notorious cocaine dealer called Curtis "Cocky" Warren—I believe that I taught him when he was a kid, but I cannot remember him, so he must have been a very unprepossessing boy—walked away. He told the then head of customs, who then told me, that he had just made £87 million, before adding in his own colourful language, "And there's nothing that you can—expletive—do to stop it." Despite that history of failure, the practice continued; it certainly did so in the Haase-Bennett case.
	The officer who was in charge of the original investigation is key to the systemic problems in respect not only of the lack of co-ordination among agencies, but of how the royal prerogative applies. The reason why I say that is to do with how one gets the royal prerogative exercised, so I should explain that to the House. When I set out on this odyssey, I knew nothing about that, so I asked Members who were barristers, but they did not how it was done, either. I have learnt since how one gets the royal prerogative exercised.
	What happens is that the officer in charge of the investigation submits a report to the trial judge—I believe that it used to be called a greenfield report—and says, "Mr. Judge, these two men are contrite; in fact, they said that they wouldn't return to their life of crime." Anyone who knew anything about Haase and Bennett knew what a risible statement that was, but that was nevertheless part of that officer's entreaty to the judge, which also included claims about all the co-operation that they had given him. The judge then looks at the report and says, "My word, this is absolutely fantastic", before writing to the Home Secretary of the day. The Home Secretary then makes a decision based on the judge's letter.
	The Home Secretary does not have to say yes or no—the decision is entirely up to them, but it is presumably based on the merits of whatever the judge sends and can obviously vary from Home Secretary to Home Secretary. The Haase-Bennett case ended with a charge of conspiracy to pervert the course of justice. One of the mistakes commonly made in this place and beyond is to assume that all criminals are stupid, but I know that they are not. They may be vicious, nasty, immoral or even amoral, but one thing that they are not is stupid. Haase and Bennett knew how to find their way through the system. They knew how the process worked—I did not know; the barristers to whom I have referred did not know—because that is their business.
	Haase and Bennett also knew that they needed a pretext on which to go to the judge and say, "This is what we want—this is the quid pro quo." That was the point at which they became registered informants who were handled by a junior officer. I would argue that they manipulated that junior officer, who went unreprimanded when his senior officer pointed out that there were problems. In fact, it was not until 1998—two years after Haase and Bennett's release—that the senior officer in that case gave the junior officer an instruction not to have anything to do with those career criminals.
	I ask the House: what is any member of any agency doing mixing with such people? That officer has never been able to show whether Haase and Bennett were still registered informants. Indeed, it is quite the reverse: the evidence that he gave in 2001 in another trial of John Haase suggested that he was not an informant. There are huge problems of supervision, but let us return to the tale of the criminals and how they justified their cri de coeur to the judge—through their solicitor, of course.
	Haase and Bennett decided to become informants and provide information. They effectively gave three kinds of information. They gave information that allowed the police to intercept large numbers of guns, and when I say "large numbers", the biggest cache was 80 guns. We are talking about 150-plus weapons, including machine guns, pump-action shotguns, automatic weapons, Kalashnikovs, Semtex and grenades—enough of an arsenal to wage a war. The irony was that there was no war, despite all the rumours and everything that was said. Instead, we are talking about a staged opportunity for the police to take all that weaponry off the streets, even though it had been placed in those locations precisely to be discovered and thereby to form a plank of Haase and Bennett's argument for being seen as bona fide informants who deserved remission.
	The second thing that Haase and Bennett did was reveal to prison staff a secreted gun in Strangeways prison. That gun was allegedly to be used by a man who was on trial for a double murder, for which he ultimately was not convicted. I know nothing about the issue of that murder, but I know that it must be prejudicial to that man's trial if a gun secreted inside a prison is attributed to them and the allegation is made that he was going to take hostages in order to escape. At the very least, I would hope that somebody in authority—somebody in the Government—would ponder that and consider the case again, because that man has been in prison for 14 years already.
	Once, when I spoke to John Haase in a high-security prison, I mentioned the prisoner who had carried the can over the gun, Thomas Burke. John asked me, "Have you ever met him?", and I said that I had not. He asked, "Do you know him?", and I said that I did not. He said, "He's mad", and I asked "What makes you say that, John?" He replied, "When he shot those two blokes, he never wore a balaclava; everyone could see who he was." So, Haase thought that his madness was not in killing people, but in doing it openly and not hiding his face when committing that horrendous crime. Those are the kinds of people we are dealing with, but Haase's word was taken in that case.
	The third area in which Haase and Bennett operated was the traditional area of the supergrass—turning over all the underlings. Haase did that by the bucket load, and probably saved himself a lot of money, as those people are being taxed by other criminals now that they have gone down. That is how the underworld works. Nevertheless, the people in authority thought it was a great deal, and that Haase and Bennett had done the state a tremendous service by bringing those matters to the attention of the authorities. The fact that it was all a conspiracy that was designed specifically to get them out of jail seemed to pass by the authorities, although it did not pass by anyone in the underworld, or anyone with half a brain who looked at the facts. For example, all the gun caches were discovered without anyone ever being apprehended in association with them, and no one was ever near the scene of the crime. Individuals who could see the scam voiced their concerns, but Government agencies collectively and systemically failed. In so doing, they failed the people of this country and let the criminal justice system down.
	Many things have come to light, even since the conviction, that merit further investigation of the case. Back in 1996, the then Home Secretary wrote letters to Members of the House, on the advice of officials, about the original conviction. One letter expressed the view that Haase and Bennett had no part in the importation of drugs, but they did. Everybody knew that, including the authorities and me. In fact, there was a plea bargain, in which the importation charge was dropped. Haase and Bennett pleaded guilty to distribution, because they were already looking ahead at how easily they could manipulate the system. They knew that if they were charged with importation, as well as distribution, it would be much more difficult for them to convince the judge and the Home Secretary that their sentences ought to be commuted. Things were that well planned. Unfortunately, Members of this place were misled, and were told that Haase and Bennett were not involved in importation. Oh yes they were, and the officials knew they were. The fact that a deal was done is neither here nor there. It is quite different to say that they were not involved in importation.
	I realise that Haase and Bennett were practised liars, but it has really been struck home to me how badly the different agencies are co-ordinated when it comes to dealing with a sophisticated manipulation of the system. The original trial judge, David Lynch, was in the witness box in the recent court case. I spent three days in the witness box, but it must have been very embarrassing for Judge Lynch to have to appear in it. I was quite taken by one of his widely reported comments. He said that he would never have become involved with the recommendation if he had known how tainted it all was. He was told that Haase and Bennett were going to change their identities and go to South America, but if that had been so, I would not have been on the case 12 years ago. Perhaps, then, Operation Ainstable would never have taken place, and they would not now be incarcerated. The case would just have been another subversion of the criminal justice system.
	Thank God for the Freedom of Information Act 2000, even with all its limitations, because I have managed to obtain one piece of correspondence, after just about anything else of practical use had been deleted. R. J. Wood of the Home Office's criminal cases unit wrote, on 11 October 1996, in an advice note to the then Home Secretary:
	"We knew from the outset after all that Haase and Bennett intended going back to their Liverpool stamping ground".
	They knew from the outset. I find that amazing. They knew—as I said earlier, anybody with half a brain knew what Haase and Bennett would do. It is their business and trade; they never change. They were going back to their stamping ground. But who advised the judge? Was this not in the letter that went to the Home Secretary? Is there no full explanation or background briefing note, or is it just two pals who drop a little billet-doux to each other, on the back of which two seasoned criminals are allowed back on the streets to prey on the people in my constituency and many others in the country? If there is no communication on these matters, that is appalling.
	I mentioned earlier that these decisions are taken by the Home Secretary of the day. I have just quoted Mr. Wood of the criminal cases unit. He was a very assiduous adviser—and for all I know he still is, to the present Home Secretary. Perhaps he is in a well-earned retirement. Referring to a 1993 case, he wrote to the then Home Secretary on 27 June 1996 to state:
	"The amount of remission to be recommended to the Palace is a matter for the Home Secretary. This position recognised that responsibility for recommendations to Her Majesty resides with the Home Secretary, not the judiciary."
	I would argue that that is wrong.
	If I had a choice, I would try to find a way for a panel of senior judges who are in some way fire-walled from the trial judge—that would not be impossible—to take any decision on the exercise of the royal prerogative. Is that not better than one individual—him or her sitting in splendid isolation—taking the decision after being given a half-accurate letter, perhaps guilty of sins of omission, from a judge? Is that a basis for the Home Secretary of the day to make a judgment? That cannot be right.
	It worries me that at some time in the future we will have a repeat of this, when others learn how to abuse the system. As I mentioned, it happened in the '70s and we thought that we had cleared it up; this is a case from the '90s and we think that we have cleaned it up. It is going to happen again unless there is better co-ordination between the agencies concerned.
	In this case, there must also be somebody somewhere who is able to look into the roles of some of the individuals involved. I am very concerned, and always have been, about the role of the customs officer who was the handler for the two informants. He played a most peculiar role in this sorry tale, and more detail is already on the record from the debates that we have had. I would certainly like somebody to look into why a prison officer—albeit a temporary one, allegedly—was able to take a gun into a prison. A report was done, but no one has ever seen it. It is kept in-house; it is another instance of the culture of secrecy that we have in government. A prison officer smuggled a gun into a prison and a report was carried out, yet it has never been published anywhere. There is something radically wrong there: it certainly does not help to create a greater degree of faith either in the criminal justice system or the jail system. We need to look into what went on.
	In short, I believe that we need a full, open and independent inquiry into this case, which strikes at the very heart of our criminal justice system. In fact, for quite a while, these people were successful at completely subverting the criminal justice system. On the face of it, the customs were duped, the police were duped, the Home Office was duped, the judge and the judiciary were duped. Everybody was duped by two career criminals. Yet to the best of my knowledge, no one in government has ever accepted any responsibility for this. It is as if it just happened as an act of God. It did not; it happened because the systems were not in place to deal with it.
	I hear whispers, but no formal announcements, that procedures have changed in the police forces, in Customs and Excise or whatever agency is involved now—the Border and Immigration Agency or the Serious Organised Crime Agency—and all over the place. I do not believe that. I fear that until someone has investigated what took place in what amounts to a scandal involving the subversion of our criminal justice system and has put that on the record, we shall merely pass time until we see a repeat of what happened.